Emaar Malls, which is headed by Dubai billionaire Mohamed Alabbar, has confirmed that it made an offer to acquire online retailer Souq.com, challenging an existing bid from global e-commerce giant Amazon.com Inc.
“Emaar Malls has submitted a bid worth $800 million for Souq.com in line with the strategy to align e-commerce with physical shopping,” Emaar Malls said in a statement.
The bid has still not been accepted by the shareholders of Souq.com, the firm said.
“If the bid is approved, the impact on Emaar Mall’s profit for the quarter in which the acquisition is completed and for the year 2017 will not be material,” it said.
On Saturday, media reports said Emaar Malls, the shopping-center unit of Dubai’s biggest publicly traded property developer Emaar Properties PJSC, offered about $800 million for Souq.com, which includes a convertible deposit of $500 million.
However, Amazon has an exclusivity clause in its buyout talks for Souq.com, Bloomberg reported citing persons familiar with the development.
No final agreement has been reached with any of the parties, it reported.
The news comes within days of reports of Amazon.com agreeing to acquire MENA retailer Souq.com, just two months after walking away from talks to purchase the Dubai-based online retailer following disagreements over the price.
The transaction is reported to be in the $650-$800 million bracket, a fraction of Amazon’s market capitalization of almost $400 billion.
Developments involving Souq.com, Amazon and Emaar Malls are emerging at a crucial moment for the region’s e-commerce ecosystem.
Middle East-based online shopping platform Noon.com, founded by Emaar’s Alabbar, is said to be launching within a few weeks after a delay from its initial January launch date.
Noon was founded last year by Alabbar, who is leading the company in a joint venture with Saudi Arabia’s Public Investment Fund and prominent GCC investors.
Noon, which is launched with an initial investment of $1 billion, will offer millions of products covering electronics, music, games, beauty, health, books, home, sports and more, it said in a statement.
It was in September 2016 that Bloomberg reported that Amazon was planning to bid for a stake in Souq.com as the e-commerce giant seeks to expand in the Middle East.
The deal would have valued Souq.com at least $1.2 billion. But the price has since dropped down and the transaction moved to an outright sale from the purchase of a 30% stake.
Over the years, Souq has emerged as the top regional internet giant that sells almost 1.5 million products across 30 odd categories in the Middle East and North Africa (MENA), attracting almost 45 million visits per month, with over 10,000 merchants.
Souq.com’s existing investors include Tiger Global Management and South Africa’s Naspers Ltd. The company hired Goldman Sachs Group Inc. to find buyers for a stake last year, people said at the time.